Legislators turn up the heat on overdue Medicaid computer system

Published: July 1, 2011

A last-minute amendment added to the state budget package calls for the state Department of Information Technology and the Department of Health and Human Services to hire a consultant to look into implementation of a long-delayed Medicaid management information system, or MMIS.The study would be paid for by the current MMIS contractor ACS and conducted by Oct. 1. The committee also demanded that HHS give a monthly update on the contract, and what it is doing to enforce a contract clause that would make ACS pay for delays.The state awarded $61 million to ACS (now part of Xerox) in 2005, underbidding EDS (now part of HP) by about $10 million. The contract - one of the state's largest -- coordinates the payment of more than $800 million to some 7,000 Medicaid providers and 100,000 recipients.At the time, ACS said its system was tried and tested, while rival EDS charged that ACS had suckered New Hampshire into being guinea pigs in ACS' quest to develop a new system that it hoped to market around the country.Since then, repeated delays have stretched implementation from two years, to six and counting. While the amount of the original ACS contract remained the same, the state has been forced to add to the cost to include additional functionality to keep up with changing regulations and technology. It also has had to continue to contract with EDS, as well as various consultants related to the MIS contracts, to operate the original system.The Executive Council approved each of the contract extensions, though the votes were often accompanied by expressions of reluctance or exasperation.Monthly reportsThe Legislature got more involved when lawmakers became concerned that the delays might thwart the implementation of a Medicaid managed care system, which proponents hop will save the state $30 million.HHS Commissioner Nick Toumpas said that if the new system couldn't handle it, the state might have to pay ACS more to develop that functionality."The system did not require managed care functionality. As such, we cannot hold someone responsible for functionality that we did not contract for," Toumpas previously told NHBR.At the time, the commissioner said that ACS would not meet its previous Dec. 31, 2011, target and did not provide another one.The amendment, introduced by Senate Finance Chair Chuck Morse, R-Salem, would require that the Department of Information Technology hire the consultant, in conjunction with HHS, that the consultant "review and evaluate" the project and provide a report on the implementation and the projected "go-live date."The consultant would also report on whether the system would meet specific federal and state requirements, as well as the state's managed care requirements, and provide a "detailed list of any systems that will not be available upon start-up."HHS will also be required to issue monthly reports on the status of implementation and the "department's efforts to seek cost recovery under section 10.1 (Failure to Meet Start Date for Operations Phase)" of the original contract.The amendment might face legal hurdles, since the requirement that ACS pay for a consultant's report was not in the original contract.

This article appears in the July 1 2011 issue of New Hampshire Business Review